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Terminology

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• Underwriting - the process of attraction of investors on behalf of issuers and allotment of securities in the market issued by issuers.

• Broker - Professional financial company that acts as intermediary between a buyer and a seller in securities markets. Broker also provides financial consulting service to investors and issuers.

• Dividend - Amount paid to shareholders from profits of a company.

• Delisting - Removal of securities from listing.

• Prospectus - A document that provides details about a company and a new offering of securities

• Issuance - release of new securities to market

• Issuer - A legal entity that sells equity and debt securities to investors for the purpose of raising capital

• Bond - a security that enables to acquire a specified amount of interest for a specified length of time, and to repay the loan on the expiration date as well as the interests on quarterly, semi-quarterly or annual basis.

• Initial Public Offering - a company’s first offering of stock to the public or offering for open sale in the primary market.

• Primary Market - first sale of newly released securities by an issuer

• Investment Memorandum - a marketing document that is presented to investors. An investment memorandum provides details on management awards, operations and financial situation, use of proceeds, issuer’s dividend policy and capitalization and other information.

• Capital Market - a market where bonds, shares and other securities are traded.

• Clearing and Settlement - the process of calculating the mutual obligations of market participants (data collection, inspection, reconciling, preparation of accounting documents), the completion of a transaction and mutual execution of obligations.

• Coupon - Interest rate paid on a bond, expressed as a percentage of the face value. Interest payments are usually quarterly, semi-annual and annual. It is expressed as a percentage of the face value of a bond. For example, owner of a 1,000 AZN bond with an annual coupon rate of 9% receives 45 AZN every six months.

• Liquidity - Situation characterized by high activity of a market, trade and high number of buyers and sellers of various financial tools.

• Listing - sale of securities in a regulated market that comply with conditions and requirements of a stock exchange

• Registry - State registry of securities is carried out by the State Committee for Securities and the registry of security owners is carried out by the National Depository Center.

• Stock - A type of security that signifies ownership in a company and represents a claim on part of the company’s assets and earnings.

• Secondary Market - A market where securities are traded by market participants after their allotment.